Seniority awards do not share the income tax exemption for seniority premiums
Seniority award. It is not equivalent to the seniority premium for purposes of the exemption under article 93, section XIII, of the Income Tax Law.
Official heading (Spanish): PREMIO DE ANTIGÜEDAD. NO ES EQUIPARABLE A LA PRIMA DE ANTIGÜEDAD PARA EFECTOS DE LA EXENCIÓN PREVISTA EN EL ARTÍCULO 93, FRACCIÓN XIII, DE LA LEY DEL IMPUESTO SOBRE LA RENTA.
The ruling
An individual sought an income tax refund, claiming a seniority award was exempt. The SAT denied it and the TFJA upheld the denial. On direct amparo, the Collegiate Circuit Court held that a seniority award is not analogous to the seniority premium under article 93, section XIII, of the Income Tax Law, because it is a reward rather than a separation benefit.
Our take
The court draws the line by the nature of the payment, not its label. The seniority premium is paid when employment ends and therefore shares the exemption for separation payments. A seniority award recognizes tenure during employment and is taxable income. For payroll teams, the risk lies in recognition plans designed or invoiced under ambiguous names. Contracts, policies and payroll e-invoices should state precisely what is paid and why; a label will not rescue a payment that is, in substance, an award.
What to do
- Review seniority recognition plans and their income tax withholding treatment.
- Align payroll e-invoice descriptions with the actual nature of each payment.
- Avoid refund claims that rest on equating seniority awards with seniority premiums.
Details
- Court
- Collegiate Circuit Court
- Type
- Isolated precedent
- Identifier
- III.7o.A.2 A (12a.)
- Digital registry
- 2032714
- Published
- October 2, 2026
- Area
- Tax
- View official source ↗
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Prepared by Artegia for information only; not legal advice. Headings in English are unofficial translations. The official text is the one published in the Semanario Judicial de la Federación or the TFJA journal.